February 16, 2015

In an ideal world, HR would be able to hire the perfect mix of internal and external candidates to keep their company running smoothly and its staff happy. Unfortunately, none of us work in a perfect world! So, that leaves HR with the internal vs. external quandary for most of their hires. While there isn’t a one-size-fits-all solution for when to hire internally or externally, here are some pros and cons of both options:

Internal Hiring

Pros

Increased engagement

Quicker onboarding

Less expensive

Better cultural fit

Cons

Potential for less innovation

Internal politics

Biased hiring

Fewer applicants

External Hiring

Pros

Fresh ideas

Larger talent pool

Increased diversity

Avoid internal politics

Cons

Less cost-effective

Longer onboarding

May not fit company culture

Possible detriment to staff morale

These lists of pros and cons only skim the surface of the components HR considers when making the decision of internal vs. external hiring. If you look at the numbers, the majority of positions are filled with external candidates. The SHRM Human Capital Benchmarking Database shows that in 2013, 66% of positions were filled externally compared to 26% internally.

Decisions, Decisions …

Each company and each position is different and has different needs. HR will usually make its internal/external hiring decision based on whether the position requires collaboration, if the skillset is unique to the company, what the internal supply of talent actually is and any changes within the company or industry. Whichever approach your HR department decides to take, it needs to consider these factors when making a decision:

Thoughtful Job Descriptions
If you find you’re using the same tired, canned job descriptions every time and getting unsatisfactory hires, it might be time to breathe new life into what’s written. Be sure the language you choose is universal and not limited to just what an internal candidate would understand. Take some time to see how the competition is handling job descriptions. Many industries are opting for more fun yet realistic job descriptions versus the old, worn out ones.

Beware of Biases
No one is without bias. But in HR, you can’t let that affect any decision you make. Don’t fall for any pressure to hire from within if that’s not the best decision for the company. Take a hard look at your hiring practices to see if there’s more of an internal or external trend and then determine why it may favor one over the other.

Take a Good Look at What Makes You UniqueEvery company and its culture are truly unique. Take a good, objective look at what makes your organization and the positions unique. This will help the HR team better weave its new hires and the company culture into a more tightly-woven and cohesive entity.

Think Succession Planning
Make sure you know the movers and shakers within your company and those that do their best to fly under the radar and take that into consideration when new positions open up. Keep upper management up-to-date on who’s moving up and who is stalled out. This lets you be proactive when it comes to succession planning.

Don’t Stop Onboarding

If you think that once the new hires have been shown their desk and gone through orientation that onboarding is done, think again. To the new hires, onboarding can be a long, slow process. Make sure they get to spend quality time with not only the team they’ll be working with but with upper management as well. The more employees feel like they understand and are part of the big picture, the more welcome they’ll feel and the harder they’ll work.